FORT WORTH, Texas--(BUSINESS WIRE)--Nov. 7, 2003--The Leather Factory, Inc. (AMEX:TLF) today announced an agreement with Wells Fargo Bank Texas, N.A. ("Wells Fargo") for a $6,000,000 revolving credit facility. This credit facility replaced the Company's prior credit agreement with Wells Fargo Bank Minnesota, N.A. and refinanced the principal balance ($2,054,549) of the prior facility. The new loan matures in November 2005.
Wray Thompson, Chairman and Chief Executive Officer of The Leather Factory, Inc. explained, "Over the last several years, The Leather Factory has been steadily reducing the principal balance of our bank indebtedness. Several months ago we began discussions with the Commercial Banking Group of Wells Fargo Bank Texas, N.A. about moving our credit relationship to them and reducing our interest rates and credit fees. In light of Leather Factory's pay down of the indebtedness under the prior credit facility, we also decided to reduce the maximum credit line in the new facility. We believe that the company can take this step without hindering our growth plans."
The new agreement provides for a borrowing base calculation generally similar to the calculation in the previous agreement, although the advance rate on eligible inventory has been reduced from 60% to 50%. Even with the drop in the advance rate, the Company believes availability will be more than sufficient for expansion and current operations. The interest rate on the new credit facility will drop to prime minus 0.5%, or the Company may elect to use the 30-, 60-, or 90-day London interbank Eurodollar rate ("LIBOR") plus 2.00%. The financial covenants and collateral requirements in the new agreement are similar to those in the prior agreement, and reporting requirements to the lender have been relaxed substantially.
The Leather Factory, Inc., (http://www.leatherfactory.com), headquartered in Fort Worth, Texas, is an international marketer and wholesale distributor of a broad product line including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, shoe repair supplies, saddle and tack hardware, and do-it-yourself kits, and is a manufacturer and distributor of fancy hat trims, leather lacing and kits. The Company distributes its products through 30 warehouse distribution units located throughout the U.S. and Canada and through its subsidiary, Tandy Leather Company, via retail stores and mail/telephone/website orders (http://www.tandyleather.com). Its common stock trades on the American Stock Exchange with the symbol "TLF."
This news release contains forward-looking statements, such as the statements regarding future capital requirements. All forward-looking statements made here or in other news releases issued by The Leather Factory, Inc. are based on current expectations as of the date of the release. These forward-looking statements involve risks and uncertainties that could cause the results of The Leather Factory, Inc. to differ materially from management's current expectations. Many of these risks and uncertainties are detailed from time to time in TLF's reports filed with the Securities and Exchange Commission, including its most recent annual report on Form 10-K.
CONTACT: The Leather Factory, Inc., Fort Worth Wray Thompson,
817-496-4414 or Shannon L. Greene,
sgreene@leatherfactory.com
SOURCE: The Leather Factory, Inc.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Tandy Leather Factory, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.